S 25-20 (Algo) Special offer pricing LO P7 Radar Company sells bikes for $470 each. The company currently sells 4,000 bikes per year and could make as many as 4,320 bikes per year. The bikes cost $265 each to make: $160 in variable costs per bike and $105 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 320 bikes for $450 each. Incremental fixed costs to make this order are $100 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? (a) Special offer analysis Sales Variable costs Contribution margin Per Unit Total $ 450 $ 144,000 160 51,200 290 92,800 Fixed costs (incremental) Income 290 (b) The company should Accept special offer Exercise 25-5 (Algo) Sell or process LO P2 Varto Company has 11,000 units of its product in inventory that it produced last year at a cost of $153,000. This year's model is better than last year's, and the 11,000 units cannot be sold at last year's normal selling price of $53 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $165,000 or (2) they can be processed further at an additional cost of $127,500 and then sold for $286,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Sell as is Process Further 0 Skull Company makes snowboards and uses the total cost method in setting product price. Its costs for producing 14,500 units follow. The company targets a 10.0% markup on total cost. Variable Costs per Unit Direct materials Direct labor Overhead Selling, general and administrative $ 109 34 29 8 Fixed Costs (total) Overhead $ 479,000 Selling, general and administrative 449,000 1. Compute the total cost per unit if 14,500 units are produced. 2. Compute the dollar markup per unit. 3. Compute the selling price per unit. (For all requirements, round your final answers to the nearest dollar amounts.) Answer is complete but not entirely correct. 1. Total cost per unit $ 244 2. Markup per unit $ 30 3. Selling price per unit $ 268